The Entertainer won’t let a tough year ruin the toy chain’s Christmas

“How’d you like to spend Christmas on Christmas Island? How’d you like to hang a stocking on a great big coconut tree?”

For the night shift, heading home after nine hours filling shelves with Hatchimals, Play-Doh and Lego in one of toy chain The Entertainer’s busiest London stores, escape – perhaps even just from the music – looks an appealing prospect.

Saturday promises to deliver the retailer’s biggest takings of the year after a fraught Christmas trading period, as poor industry-wide sales were compounded by the woes of loss-making rival Toys R Us, which has struck an eleventh hour pension deal to avoid administration.

Gary Grant, the family-run chain’s managing director and founder, is not afraid to get his hands dirty and at breakfast time on Wednesday is stuffing handfuls of Beanie Boo soft toys into a display near the front of its Westfield London store ahead of the morning rush.

“It’s been a tough year,” said Grant, who fears sales in December, the most lucrative time of the year for toy chains, will fall short of last Christmas. “We had a good run until September but October was average, then November was terrible – down 9% – and unfortunately December has continued in that vein.”

Toy specialists have been in the eye of a storm in recent years amid intense price competition from aggressive online players such as Amazon, as well as supermarkets. Prices were pushed up by last year’s Brexit blow to the pound, which increased the cost of importing goods from the far east, masking declines in the number of toys sold.

While the year’s hottest toys, such as Fingerlings (small animatronic monkeys which cling to your finger) and Luvabella dolls are like gold dust, The Entertainer started its clearance sale a week early to ensure it could offload other unsold toys after taking a view on the depressed pattern of trade.

But while other rivals race to make up lost sales over the weekend, all 150 of The Entertainer’s shops will be closed on Christmas Eve because Grant, a devout Christian, always gives his staff Sundays off – even though this year that means missing out on several million pounds worth of sales.

Do staff think he’s mad to stay closed? “No they don’t,” he said. “They trust me. I want my staff to have a day of rest and spend time with their families.”

Toys R Us’s landlords have agreed to a company voluntary arrangement (CVA), a restructuring plan that will result in the closure of 26 stores in the new year and reduce the size of other outlets. The retailer’s US parent filed for bankruptcy protection in September and by shedding its worst stores, it is hoped the lossmaking UK chain can have a future.

During this decade the number of UK toy shops has declined by nearly 6% to 1,200, according to property analyst Local Data Company.

The fall is steeper than for other retail sectors such as fashion and is against a backdrop of huge online growth. Internet toy sales have increased more than 60% over the last five years and now account for 37% of the market, according to retail consultancy GlobalData.

Despite such huge changes, The Entertainer has thrived by opening stores on busy high streets and in shopping centres including Westfield London in Shepherd’s Bush.

By comparison Toys R Us has struggled as the large out-of-town sheds that are the US brand’s calling card fall out of favour. It has also been hit by the arrival of a tough new retail park competitor, Irish chain Smyths Toys, at a time when stiff online competition means parents expect a distilled version of blockbuster London toy shop Hamleys from their local store.

“I hope when you conjure up a toy shop in your mind you see an Entertainer,” said Grant. The retailer will open another 15 shops in 2018 and temporarily close Westfield London, one of its top three stores, for a £600,000 refurbishment that will include new interactive displays.

“I don’t see Toys R Us as a toy shop. It’s a large shed that sells toys. I’m not sure they have the magic parents remember from their childhood toy shop.”

Some suppliers stopped delivering stock to Toys R Us in the autumn because they were having difficulty securing the credit insurance that would protect them if the chain failed. The powerful insurers pulled in their horns during the last consumer downturn and there are signs they are looking to do so again.

“We work closely with our credit insurers because they are more powerful than our bank,” explained Grant. “They have rung us in the last month asking how trading is and for more up-to-date management accounts. They are nervous, and probably not without good reason, not necessarily of the toy industry but of the whole high street.”

This weekend’s dash to the shops will help save Christmas for some retailers, with Grant reporting a huge pickup in trade in the last 48 hours when we speak again on Friday morning. “I sent a video round the shops to say life is OK, it’s just not as good as we thought it was going to be,” he said. “We could have had an unbelievable year but now it’s just going to be very good.”